power sector in india
DESCRIPTION
Indian power sector overviewTRANSCRIPT
OVERVIEW OF
INDIAN POWER SECTOR
Prepared by- Dayanand kherwar
2003 onwardsGrowth Era
1991–2003Liberalisation
Era
1956–1991Nationalisatio
nStage
Electricity Act (2003)National Tariff Policy (2006) Elimination of licensing for generation projects
Increased competition through international competitive bidding engaged in power generation, transmission and distributionLaunch of UMPP scheme Various schemes and initiatives such as Jawaharlal Nehru NationalSolar Mission to promote renewableenergyCivil nuclear agreement with the USfor nuclear technology and fuel Fuel supply agreement of power companies with Coal India Ltd (CIL)
Private equity investments in the sector have surged since 2010
•
•
•Legislative and policyinitiatives (1991) Private sector participation ingenerationFast-track clearing mechanism of private investment proposals
Electricity Regulatory Commissions Act (1998) for establishing Central and State Electricity Regulatory Commissions and rationalisation of tariffs
•Before 1956Introductory
Stage• •
Industrial PolicyResolution (1956) Generation and distribution of powerunder stateownership Power losses, subsidies,infrastructurebottlenecks andresource constraints
•
• •
•
•• Electricity(Supply) Act1948
• Establishment of semi- autonomous State Electricity Boards (SEBs)
••
•
•
•
Source:; WWW..NPTI.IN
POWER
POWERIndia as a power
Producer and Consumer globally
• With a production of 1,102.9 TWh, India is the third largest producer and fifth largest consumer of electricity in the world
• The per capita electricity consumption in 2012-13 is -917.18 kWh.
• As per census, only 55% of rural households have access to electricity.
Large-scale governmentinitiated expansion
plans
• The government targets capacity addition of 89 GW under the 12th Five-Year Plan (2012–17) and around 100 GW under the 13th Five-Year Plan (2017–22)
• Investments of around USD223.9 billion are planned for the power sector during the 12th
Plan Five-Year Plan
Robust growth inRenewable sector
• Renewable energy capacity additions of 30 GW are planned in the next five years to meet the growing energy demand
• Wind energy is estimated to contribute 15 GW, followed by solar power at 10 GW
Source:; WWW..CEA..nic.inC
POWERThe power sector in India is mainly governed by the Ministry of Power. There are three major pillars of power sector these are Generation, Transmission, and Distribution
PRESENT POWER SCENARIO OF INDIA
INSTALLED CAPACITY
(248509.63MW)
ANNUAL GENERATION(1102.9 TWh)
SUPPLY DEMAND GAP
(4.1% PEAK)
PER CAPITA CONSUMPTION
(917.18)
PLF(68.15)
ELECTRIFIEDVILLAGES(95.60%)
Source:; WWW..CEA..nic.in
POWERGENERATION
CAPTIVE TOTAL RES THERMAL NUCLEAR HYDRO0
50000
100000
150000
200000
250000
300000
39375.36
248509.64
31692.14
171376.09
4780
40661.41
Series1
All India Installed Capacity (MW) as on 31-05-2014 Region -wise
68255.9
93290.7
86962.99
CENTRALSTATEPRIVATE
All India Installed Capacity(MW) as on 31-5-2014(Sector-Wise)
Source:; WWW..CEA..nic.in
Electricity production in India (TWh)Electricity production in India (excluding captive generation)stood at 911.6 TWh in FY13, a 4 per cent growth over the previous fiscal
912876Over FY07–13, electricity production expanded at a CAGR
of 5.5 per centCAGR: 5.5%
The Planning Commission’s 12th Plan projects that total 772
domestic energy production would reach 669.6 milliontonnes of oil equivalent (MTOE) by 2016–17 and 844 MTOEby 2021–22
FY07 FY08 FY09 FY10 FY11 FY12 FY13
Source: Central Electricity Authority (CEA), Aranca Research;Notes: FY - Indian Financial Year (April-March), TWh - Terra Watt Hour
811
724705
663
POWER
Source:; WWW..CEA..nic.in
68%
Source: Ministry of Coal,
GasIndia’s proven natural gas reserves measure about 1,074 billion cubic metres
Thermal
CoalIndia has large reserves of coal. As of April 2012, total coal reserves stood at 293.5 billion tonnes; of this, 118.1 billion tonnes were proven reserves
POWER
Thermal power plants convert energy rich fuel into electricity and heat. Possible fuels include coal, natural gas, petroleumproducts, agricultural waste and domestic trash /waste. Thermal power accounts for 69 % in total energy production.Thermal power is produced from coal oil and natural gas. Total installed capacity of thermal power is 171376.09 MW
THERMAL POWERThermal fuel maintains a leading position among the fuel used for power generation
RES; 31692.14;
13%
THERMAL; 171376.09; 69%
NUCLEAR; 4780; 2%
HYDRO; 40661.41;
16%
RESTHERMALNUCLEARHYDRO
coal; 147568.39; 86%
Gas; 22607.95;
13%Diesel; 1199.75; 1%
coalGasDiesel
POWERISSUES AND CHALLENGES
• Fuel quality & availability
Coal quality & availability constraints
• Coal beneficiation
• Power generation technology
• Clean coal based technologies
• Land accusation Problem
• Logistic route Rail/ Road, pipelines, port etc (for fuel, water, ash etc)
• Power evacuation route (Electricity Grid) • Water source
• Price of Fuel • Volatility of coal price • Environmental clearance.
POWERHYDRO POWER
Hydropower is a renewable, non-polluting and environment friendly source of energy. Oldest energy technique known to mankind for conversion of mechanical energy into electrical energy. Contributes around 22% of the world electricity supplygenerated .
In India, Jamshed ji Tata built the first hydroelectric power dam in the Western Ghats of Maharashtra in the early 1900s to supply power to Bombay’s Cotton and Textile Mills
Out of the total power generation installed capacity in India of 2,48,509.64MW (June, 2014), hydro power contributes about 16% i.e. 40661.41 MW. The total hydroelectric power potential in the country is assessed at about 150,000 MW, equivalent to 84,000 MW at 60% load factor. The potential of small hydro power projects is estimated at about 15,000 MW.
As per assessment made by CEA, India is endowed with economically exploitable hydro-power potential to the tune of 1 48 700 MW of installed capacity. The basin wise assessed potential is as
Basin/Rivers Probable Installed Capacity (MW)
Indus Basin 33,832
Ganga Basin 20,711
Central Indian River system 4,152
Western Flowing Rivers of southern India 9,430
Eastern Flowing Rivers of southern India 14,511
Brahmaputra Basin 66,065
Total 1,48,701Source:; WWW..CEA..nic.in
10
PROSPECTS OF HYDRO GENERATION
Source: IEA - Key World Energy Statistics 2006, CEA.
Share of Hydropower in Electricity Generation Initiatives to encourage Hydropower
Vast untapped Hydropower potential in India
Hydroelectric projects - Renewable, non-consumptive and environmentally benign source
of energy.
GoI has identified 162 schemes for preliminary feasibility reports under the 50, 000 MW
hydroelectric initiative during the 12th plan period (FY 2012 – 17).
Till recently, issues like dearth of adequately investigated projects, long clearance and
approval procedures, resettlement and rehabilitation issues, land acquisition problems,
power evacuation problems etc. had contributed to the slow pace of hydropower
development in the country. However, considering the large hydropower potential in the
country and the much required energy security, government is accelerating hydropower
reforms. Some of the recent government initiatives in this space include- Preparation of a shelf of well- investigated projects and streamlining of
statutory clearances and approvals for the same.- Establishment of independent regulatory commissions’- Providing for long-term financing for projects,
Govt. of India is also cooperating with Bhutan and Nepal in hydropower development for
over a decade now. Indian companies are setting up hydropower plants in these
countries as both Bhutan and Nepal have huge potential of hydropower generation.
Evacuation from North Eastern region and Nepal
North East India as well as Nepal have huge potential of hydropower
generation.
North East India is already connected to Northern, Western and Eastern
Grid. PGCIL is further strengthening the capacity to ensure that evacuation
is not a constraint once the planned power plants in North East are
commissioned.
To encourage setting up of hydroelectric plants in Nepal and attract private
investment, Govt. of Nepal has set up a JV with ILFS to develop four 220 kv
double circuit lines from Nepal to India.
57
39.6
16.1 16.1 12.7 8.8 6.5
82.8
98.8
0
20
40
60
80
100
120
Norw ay Brazil Canada Sw eden China Worldaverage
India Japan USA
During April-Feb 2007, share of hydropower gene ration in India was
higher at about 17%
MW %age
Identified capacity as per re-assessment study
148,701
Capacity developed 29,572 19.9%
Capacity under construction 13,286 8.9%
Capacity yet to be developed 105,843 71.2%
POWER
POWERISSUES AND CHALLENGES
• Geological surprises• Land acquisition• Rehabilitation & Resettlement• Forest clearance• Environment clearance• Agitations• Poor road infrastructure• Lack of access to data e.g. hydrological data • Renewable, but yet not counted as renewable• No RPO/REC• No Feed-in Tariff• No excise/customs duty benefit (except for mega projects)• No accelerated depreciation• Peaking power does not figure in long term power purchase plans of utilities. Nor do regulators insist on it and why should they, when they can over-draw at will?• No utility ties up power years in advance. Long gestation projects such as hydro suffer• Consequently, hydro has to compete with thermal in power procurement. May suffer if tariff, particularly first year tariff, is higher than thermal• Invariably, fuel costs rise faster than the indices for comparison• Excise/customs duty exemption only for equipment, but not for civil part• 75% of hydro project costs are for civil, whereas only 10- 15%% project costs of thermal projects are for civil• Construction period 4 years for thermal, but 6 to 8 years for hydro. ROE not allowed during construction: Low IRR• Many projects have to pay upfront charges to States, which carry no return• Project preparation longer and more expensive than in thermal (DPR, Land acquisition, R & R etc)
POWERISSUES AND CHALLENGES(CONTD…)
• Approach road construction also a heavy initial burden
• Tariffs do not reflect peaking benefits• A large part of tariff of a thermal plant is fuel, whereas most of the tariff of a hydro plant is accounted for by capital cost• Longer gestation period adds to the IDC burden• Hydro projects are therefore more sensitive to terms of finance• Lack of long-term finance makes tariff front-loaded, comparing unfavorably with initial tariffs of thermal plants• Allotment of projects done haphazardly• After getting upfront payment no real support from state Govt.• Project developers are expected to provide many basic amenities such as schools as CSR• Next benefit to state accrues only after commercial operation starts and free power is received
POWERNUCLEAR POWER
Nuclear power is the fourth-largest source of electricity in India after thermal, hydroelectric and renewable sources of electricity. As of 2012, India has 20 Nuclear reactors in operation in six nuclear power plants, having an installed capacity of 4780 MW and producing a total of 29,664.75 GWh of electricity while seven other reactors are under construction and are expected to generate an additional 6,100 MW.
India's first research nuclear reactor and its first nuclear power plant were built with assistance from Canada. The 40 MW research reactor agreement was signed in 1956, and achieved first criticality in 1960
There are two nuclear corporation in india
1. The Nuclear Power Corporation of India Limited (NPCIL) is a government-owned corporation of India based in Mumbai. NPCIL was created in September 1987.Nuclear Power and electricity generation and distribution
2. The Bharatiya Nabhikiya Vidyut Nigam Limited(BHAVINI) is a government-owned corporation of India based in Chennai. Bhavini was established on 2004.Nuclear Power and electricity generation and distribution
• India has a flourishing and largely indigenous nuclear power program and expects to have 14,600 MWe nuclear capacity on line by 2020. It aims to supply 25% of electricity from nuclear power by 2050.
• Because India is outside the Nuclear Non-Proliferation Treaty due to its weapons program, it was for 34 years largely excluded from trade in nuclear plant or materials, which has hampered its development of civil nuclear energy until 2009.
• Due to these trade bans and lack of indigenous uranium, India has uniquely been developing a nuclear fuel cycle to exploit its reserves of thorium.
Source:www.world-nuclear.org/
POWERINDIAN NUCLEAR POWER INDUSTRY
Source:www.world-nuclear.org/
POWER
Reactor State Type MWe net, eachCommercial
operationSafeguards status*
Tarapur 1&2 Maharashtra BWR 150 1969 Item-specific, Oct 2009
Kaiga 1&2 Karnataka PHWR 202 1999-2000
Kaiga 3&4 Karnataka PHWR 202 2007, (due 2012)
Kakrapar 1&2 Gujarat PHWR 202 1993-95December 2010 under
new agreement
Madras 1&2 (MAPS) Tamil Nadu PHWR 202 1984-86
Narora 1&2 Uttar Pradesh PHWR 202 1991-92Due in 2014 under new
agreement
Rajasthan 1 Rajasthan PHWR 90 1973 Item-specific, Oct 2009
Rajasthan 2 Rajasthan PHWR 187 1981 Item-specific, Oct 2009
Rajasthan 3&4 Rajasthan PHWR 202 1999-2000March 2010 under new
agreement
Rajasthan 5&6 Rajasthan PHWR 202 Feb & April 2010Oct 2009 under new
agreement
Tarapur 3&4 Maharashtra PHWR 490 2006, 05Due in 2014 under new
agreement
Kudankulam 1 Tamil Nadu PWR 917 (July 2014) Item-specific, Oct 2009
Total (21) 5302 MWe
INDIA’S OPERATING NUCLEAR POWER REACTORS
POWERPROJECTED NUCLEAR POWER IN INDIA
Source:www.world-nuclear.org/
POWER
Reactor TypeMWe gross, net, each
Project controlConstruction start
Commercial operation due
Safeguards status
Kudankulam 2 PWR (VVER) 1000, 917 NPCIL July 2002 3/2014 item-specific, Oct 2009
Kalpakkam PFBR FBR 500, 470 Bhavini Oct 2004 (9/2014 start-up) 2015 -
Kakrapar 3 PHWR 700, 630 NPCIL Nov 2010 June 2015
Kakrapar 4 PHWR 700, 630 NPCIL March 2011 Dec 2015
Rajasthan 7 PHWR 700, 630 NPCIL July 2011 June 2016
Rajasthan 8 PHWR 700, 630 NPCIL Sept 2011 Dec 2016
Total (6) 4300 MWe gross
INDIA’S NUCLEAR POWER REACTORS UNDER CONSTRUCTION
Source:www.world-nuclear.org/
POWERINDIA’S URANIUM MINES AND MILLS – existing and planned
District Mine Mill Operating from tU per year
Jharkhand Jaduguda Jaduguda1967 (mine)1968 (mill)
200 total from mill
Bhatin Jaduguda 1967
Narwapahar Jaduguda 1995
Bagjata Jaduguda 2008
Jharkhand, East Singhbum dist.
Turamdih Turamdih2003 (u/g mine)
2008 (mill)190 total from mill
Banduhurang Turamdih 2007 (open pit)
Mohuldih Turamdih 2012
Andhra Pradesh, Kadapa/ YSR district
Tummalapalle Tummalapalle 2012 220 increasing to 330
Andhra Pradesh, Kadapa/ YSR district
Kanampalle Kanampalle? 2017
Telengana, Nalgonda dist. Lambapur-Peddagattu Seripally /Mallapuram 2016? 130
Karnataka, Gulbarga dist. Gogi Diggi/ Saidpur 2014 130
MeghalayaKylleng-Pyndeng-Sohiong-
Mawthabah (KPM), (Domiasiat), Wakhyn
Mawthabah 2017 (open pit) 340
Source:www.world-nuclear.org/
POWERISSUES AND CHALLENGES
•Economics
•Poor management
•Low net yield of energy of the nuclear fuel cycle
•Safety concerns
•Concerns of transporting uranium
•Environmental costs not included in market price
•Risk of catastrophic accidents
•High environmental impact (with major accidents)
•Cannot compete economically without huge government subsidies
•Spreads knowledge and technology for building nuclear weapons
• Subject to terrorist attack
POWERRENEWABLE POWER
India has 150GW of renewable energy potential, about half in the form of small hydropower, biomass, and wind and half insolar, cogeneration, and waste-to-energy. Developing renewable energy can help India increase its energy security, reducethe adverse impacts on the local environment, lower its carbon intensity, contribute to more balanced regional developmentand realize its aspirations for leadership in high-technology industries.
Since 2005 the energy and climate change agenda has taken center stage in the domestic and international policy arena.India is well placed to build on this momentum. It has tripled its renewable energy generation capacity in the past five yearsnow ranking fifth in the world in total installed renewable energy capacity, and it has established a legal and regulatoryframework for sector oversight
Source:; MNRE 2009
India has the sixth largest renewable (eg, hydropower) power generation capacity (2012)
As of April 2013, total installed power capacity fromrenewable energy sources (excluding Hydro power) was27.5 GW. This accounts for 12.3 per cent of the total installed power capacity and forms 6.5 per cent of the total electricity mix
India ranks 90 sixth in the
world86
Wind energy is the largest source of renewable energy inIndia; it accounts for an estimated 87 per cent of total installed capacity (18.3 GW). There are plans to double wind power generation capacity to 20 GW by 2022
Biomass is the second largest source of renewable energy,accounting for 12 per cent of total installed capacity in renewable energy. There is a strong upside potential in biomass in the coming years
China US Germany Spain Italy India
Solar energy accounts for 1 per cent of total renewableenergy installed capacity. The country’s true potential for solar power stands at an estimated 5,000 TWh per annum
Source: Renewables 2012 Global Status Report (REN21),
Capacity addition of 30 GW is planned using variousrenewable energy technologies during the 12th Five-YearPlan. Wind Energy is estimated to contribute 15 GW,followed by solar power at 10 GW and the remaining by other sources
71
31 29 24
POWER
POWERRenewal Energy Installed Capacity in India (as of 31 January 2014)
Type Technology Installed capacity(in MW)
Grid Connected Power
Wind 20,298.83
Small Hydel Power Projects 3,774.15
Bagasse Cogeneration 2,512.88
Solar 2,208.36
Biomass Power & Gasification 1,285.60
Waste to Power 99.08
Total - Grid Connected Power 30,177.90
Off-Grid / Captive Power
Bagasse Cogeneration 517.34
SPV Systems (>1 kW) 159.77
Biomass Gasifiers- Industrial 146.40
Waste to Power 119.63
Biomass Gasifiers- Rural 17.63
Water Mills/Micro Hydel 10.18
Aero generator/ Hybrid Systems 2.18
Total - Off-Grid / Captive Power 973.13
TOTAL 31,151.03
20298.83; 67%
3774.15; 13%
2512.88; 8%
2208.36; 7%
1285.6; 4% 99.08; 0%
Wind Small Hydel Power Projects Bagasse Cogeneration Solar Biomass Power & Gasification Waste to Power
RENEWABLE ENERGY IN INDIA
Source:; MNRE
POWER
SOLAR WIND BIOMASS SHP WASTE TO ENERGY
CO GENERATION0
10000
20000
30000
40000
50000
60000
50000
45000
16000 15000
70005000
MW
ECONOMIC POTENTIAL OF RENEWABLE ENERGY
India could produce about 62GW—90 percent of technically feasible renewable capacity in wind, biomass, and small hydropower—in an economically feasible manner, if the local and global environmental premiums of coal-based generationare brought into consideration. About 3GW of renewable energy is economically feasible at the avoided cost of coal-based generation of Rs 3.08/kWh, all of it from small hydropower. About 59GW of renewable energy in wind, biomass, and small hydropower is available at an avoided cost of less than Rs 5/kWh. The full capacity of 68GW in these three technologies can be harnessed at a price of less than Rs 6/kWh.
Fuel composition in 2032
Potential of renewable energy
Source:; MNRE
POWERISSUES AND CHALLENGES• The cost plus approach to tariff setting—along with the technology-specific focus—has led to incentives that hinder the economic development of India’s renewable energy resources. India currently offers a wide variety of incentives, including feed-in tariffs; generation-based incentives; renewable purchase obligations (RPOs); central, state, and regional capital subsidies; accelerated depreciation; and tax incentives. The lack of coordination between incentives and state programs makes it difficult to adopt an economics-based least-cost development approach to tapping the country’s renewable energypotential.
• The limited availability of evacuation infrastructure and grid interconnections is one of the biggest obstacles to harnessing renewable energy potential. Much economically attractive wind and small hydropower potential remains untapped becauseof lack of adequate grid evacuation capacity and approach roads. The lack of good-quality data on renewable resourcesalso remains a problem, despite heavy investment by the MNRE in collecting data on renewable energy. The lack of support infrastructure in the form of a strong indigenous supply chain remains a major barrier. • Existing mechanisms—including single-window clearances, facilitation by state nodal agencies, and simplified regulation for smaller renewable energy projects—have proved to be of limited effectiveness. In some cases multiple bottlenecks havebeen replaced by single, larger, and more powerful roadblocks, and significant delays remain the norm. In addition, speculative blocking of land has become common, leading to unsustainable price increases.
• Skewed financial incentives for facilitating investments in renewable energy
• Too many incentive programs
• Failure to adequately address utilities’
• long-term financial concerns
POWER• Failure to develop least-cost resources first
• Inadequate long-term funding sources
• Inadequate evacuation and access infrastructure
• Lack of good-quality data
• Underdeveloped industry value chain
• Delays in clearances and approvals and long development cycle
• Land and resource acquisition issues
ISSUES AND CHALLENGES(CONTD…)
POWERTRANSMISSION
In the central sector, the central transmission utility (CTU), known as the Power Grid Corporation of India Ltd (PGCIL), is responsible for national and regional power transmission planning while the state sectors have separate State Transmission Utilities (STU). Private sector participation is negligible in transmission
PGCIL is the premier organization which handles the transmission system of India.
PGCIL
TRANSMISSION LINES
(108307ckm)SUBSTATIONS(186 NOS)
SYSTEM AVAILABILITY
(99%)
TRANSFORMATION CAPACITY(2,09,274 MVA)
INTERREGIONAL CAPACITY(40,050MW)
POWERMinistry of Power (MoP)
(Perspective planning, policy formulation, processing of projects for investment decision, monitoring of the implementation of power projects, training and
manpower development and the administration and enactment of legislation in regard to power generation, transmission and distribution)
Central Electricity Authority of India (CEA)
(Advises the government on matters relating to the National Electricity Policy and formulates short-term and perspective plans for the development of electricity systems)
Central Electricity Regulatory Commission(CERC)
(Regulates tariff; formulates policies regardingsubsidies, and promotion of efficient andenvironmentally benign policies at central
level)
State Electricity Regulation Commission (SERC)
(Regulates tariff; formulates policies regarding
subsidies, and promotion of efficient and
environmentally benign policies at state level)
Central TransmissionUtility(CTU)
(Ensures development of anefficient, coordinated and
economical system of interstate
transmission lines andundertakes inter-state
transmission)
Private / PPP(Develops transmission lines on
BOO model and charges for
wheeling electricity within the
tarrifs specified by CERC/SERC)
State Transmission Utility(STU)
(Ensures development of anefficient, coordinated and
economical system of intra-Statetransmission lines andundertakes intra-state
transmission)
CURRENT TRANSMISSION MARKET STRUCTURE
POWER
Electricity Laws(Amendment) Act Private participation allowed in generation – Up to 100% foreign ownership allowed – Operators and SEBs entered into power purchase agreements (PPAs) SEBs to be responsible for transmission and distribution of power
Electricity Laws(Amendment) Act • Private participation enabled in transmission • CTU and STUs set up ElectricityRegulatoryCommissions Act • CERC & SERCs formed • Regulator to protect & promote consumer interest, fair competition, transparency • Provide a level-playing-field for all players
The Electricity Act
Replaced theearlier laws,aiming to enablereforms &restructure powersector
• National ElectricityPolicy broughtout, mandatorycreation ofSERCs, emphasison ruralelectrification,open access intransmission andDistribution
• Introduced a non-discriminatoryopen access inthe transmission
National TariffPolicy
•Mandatorycompetitivebidding of alltransmissionprojects after Jan2011
•Framework fordetermining tariffsand rate of returnfor projects undergeneration,transmission as well as distribution
National TariffPolicy(Amendment)• Exemption tointra-statetransmissionsector frommandatorycompetitivebidding up to 5thJan 2013• Exemption ofselectexperimentalworks/ urgent/compressed timeschedule workfrom tariff basedcompetitivebidding
1991 1998 2003 2006 2011
MAJOR MILESTONES IN TRANSMISSION SECTOR
Source:; www.powergridindia.com
National
Grid
1950-60’s
1970-80s2000 onwards
Local
1950’s
State Grids by SEBs
Regional Grids with ATS of Central
Generation
(Paradigm Shift from self sufficiency at Regional level concept to National level)
Interconnecting Regional Grids with HVDC
1990s
POWEREVOLUTION OF NATIONAL GRID
Source:; www.powergridindia.com
POWERREGIONAL AND NATIONAL GRID
Transmission forms a critical link in the power sector value chain. India's powergeneration capacities are unevenly dispersed across the country creating an imbalance between the distribution of power demand and supply centres. The country has been demarcated into five electrical Regions:
Northern (NR) Eastern (ER) Western (WR) Southern (SR) North Eastern (NER)
All the regional grids are synchronously interconnected and operating as single grid known as Central Grid or National Grid.
POWERTRANSMISSION LINE NETWORK STRENGTH
In six years from 2007 to 2013, the power transmission sector registered a growth of 4.37% CAGR.
Source:; www.powergridindia.com
POWERTRANSMISSION NETWORK -PRESENT
• Transmission network spread geographically over 3.3million sq
km : Inter-State and Intra-State level
• Transmission line : 2,91,336 ckm (POWERGRID : 1,08,307 ckm) 765kV : 11,096 ckm 400kV : 1,25,957 ckm 220kV : 1,44,851 ckm HVDC Bipole (±500kV) : 9,432 ckms
• Transformation capacity (MVA/MW) HVAC :474,091 MVA
(POWERGRID : 170,000MVA, 171 S/s)− 765kV : 56,500 MVA− 400kV : 170,397 MVA− 220kV : 247,194 MVA
HVDC : 13,500 MW
• FSC – 33nos., TCSC – 6 nos.
Source:; www.powergridindia.com
POWERTECHNOLOGY BEING ADOPTED
• High Voltage line
• Increase the capacity of trans. corridor through HSIL/re-conductoring with HTLS /Upgradation
• Utilization of existing transmission lines upto full thermal capacity – Series capacitors, SVC, FACTS
• Optimization of Tower design – tall tower, multi-ckt. Tower
• GIS substation
Voltage (kV)
1977 1990 2000 2002 2012 2017-18Year
220kV400kV
500kVHVDC
765kV800kVHVDC
1200kV
765kV D/C - AC
World’s HighestVoltage level – Test station Charged in Oct.’12World’s longest
multi-terminal HVDC to harness renewableHydro Power from North-east
POWERPURSUING HIGHER VOLTAGE LEVELS BY PGCIL
POWER• Issues concerning availability of RoW and same are becoming critical –
Resistance of people, terrains in areas of mountains and forest
• Sector to grow from 228 GW to 600 GW in next 20 years – Even 765kV system may not be good enough. New methods have to be found out
• Challenges to develop Transmission system to meet the requirement of power flow from anywhere to anywhere.
• With increasing magnitude of power transmission, create new challenges of proper O&M
• Upgrade to > 50 GW inter-regional evacuation
• Creating High Voltage Evacuation Networks
• Concept to Commissioning (C2C) time is significantly high
• Delay in Commissioning of Projects Under Cost-Plus Regime
• Insufficient focus on up gradation of existing transmission lines
ISSUES AND CHALLENGES
POWER
Distribution and Retail Supply is the most critical link in the electricity market, which interfaces with the end customers and provides revenue for the entire value chain.
Indian electricity distribution caters to nearly 200 million consumers with a connected load of about 400 GW that places the country among the largest electricity consumer bases in the world. • The consumers are served by around 73 distribution utilities
13 electricity departments, 17 private distribution companies, 41 corporatized distribution companies 2 State Electricity Boards
• Rural distribution segment in India is characterized by wide dispersal of net work in large areas with long lines, high cost of supply, low paying capacity of the people, large number of subsidized customers, un-metered flat rate supply to farmers, non metering due to high cost and practical difficulties, low load and low rate of load growth. Consumer mix in rural areas is mainly agriculture and residential. • Urban distribution is characterized by high consumer density, and higher rate of growth of load. The consumer mix in urban areas is mostly commercial, residential, and industrial. Both segments are distinct with different problems and issues.
DISTRIBUTION
POWER
Com m e rcial 11%
Industrial HT 0.05%
Agricultural 10%
Industrial LT 2%
Domestic 77%
Category wise % of No. of Consumers
CONSUMER MIX IN INDIA
POWER
0
5
10
15
20
25
India Russia China Brazil World
23.2
10.66.7
16.4
8.5
Distribution losses in developing countries in 2008
DISTRIBUTION SCENARIO- High Distribution losses
POWERPRESENT DISTRIBUTION SCENARIO
• High AT&C losses
• Frequent power failures due to very old and dilapidated network
• Massive load shedding
• Low customer satisfaction Customer service standards are poor Lengthy and tedious mechanisms for resolving consumer grievances
• Uninspiring work culture
• Old and obsolete technologies still being used
• Unacceptable safety standards
POWER
Less than 20% Between 20-30% Between 30-40% Above 40%
Goa Andhra Pradesh Karnataka Delhi
Tamil Nadu Gujarat Kerala Uttar Pradesh
West Bengal Assam Bihar
Himachal Pradesh Haryana Jharkhand
Maharashtra Rajasthan Madhya Pradesh
Tripura Meghalaya Arunachal Pradesh
Punjab Mizoram Manipur
Uttaranchal Chhattisgarh Nagaland
STATE WISE AT&C LOSSES IN INDIA
POWER
S. No. Ownership/ PPP Discom Ownership Structure
1 State Owned DiscomJaipur Vidyut Vitran Nigam Limited (JVVNL)
100% Public
2Private Discom (in joint venture with the State Government)
North Delhi Power Limited (NDPL)
49% State Govt.
Noida Power Company Limited (NPCL)
27% GNIDA
3Private Discom (full ownership with the Private Entity)
Reliance Infrastructure Limited- Mumbai Distribution Operation (R-Infra)
100% Private
4 Public Private PartnershipTorrent Power Bhiwandi Limited (TPBL)-Bhiwandi & Agra
Distribution Franchisee
DISCOMS MODEL IN INDIA
POWER
1.State Government related issues
Uncertain commitment of State Governments is key impediment to the ongoing reform process. This includes delay in unbundling and restructuring of State Electricity Boards, minimal/no financial support to unbundled utilities during transition period, inadequate financial support for providing subsidized power to domestic and agricultural consumers, inadequate administrative support in curbing theft of power etc. Frequently changing policies of the State Governments in regard to subsidies/free power to farmers adversely affecting the revenue recovery and cost coverage of utilities.
2. Regulatory process related issues
SERCs are inadequately staffed with poor infrastructure. Due to lack of competency and resources in Discoms, tariff filings are often delayed. In several cases, SERC asks Discoms to revise their filings on account of data gaps or improper information. There is no central repository of data in electronic form which leads to delay in filing petitions and responding to queries from the regulator.
3. Corporate governance and institutional issues
In many cases, unbundling is limited to operational and technical segregation. Successor companies are highly dependent on their parent company (i.e. residual SEB or single buyer/trade co or Transco). and therefore, the focus on efficiency improvement from respective entities is lacking. Due to in- adequate network expansion commensurate with load growth, many power transformers, distribution transformers, 33kV lines and 11kV feeders are overloaded. Most of the distribution networks in India are quite old whichresults in to reduced reliability, increased R&M expenses and poor quality of supply. The consumer awareness about Demand Side Management (DSM) is limited which results in to higher consumption and increased losses.
ISSUES IN THE ELECTRICITY DISTRIBUTION SECTOR IN INDIA
POWERISSUES IN THE ELECTRICITY DISTRIBUTION SECTOR IN INDIA
4.Commercial issues
Commercial losses are primarily due to improper energy accounting and billing processes, faulty metering, under-billing, theft and pilferage of energy and lack of accountability within the organization. Only 87% of the total consumers in India are metered (Source: Mop, 2004-05). Many states have undertaken 100% metering programs, but not yet completed. The chart below indicates consumer metering level in some of the states.
High AT&C losses are due to high T&D losses coupled with low collection efficiency. Low level of collection is attributable to lack of employees accountability, inadequate collection facilities, limited usage of advancedsystems and technology (e.g. payment through ECS, credit/debit cards, special centres like e-Seva centres), billing errors, political/administrative interference etc.
5. Operational issues
Due to inadequate metering and data collection system in place, utilities have not been able to conduct energy audit, which is crucial for any energy business. Discoms do not have proper load monitoring and control mechanisms (e.g. SCADA, Distribution Control Centre, telecommunications etc.), which results in to haphazard control of the demand and often leads to loss of revenue and inconvenience to the consumers
POWERPower sector reforms were first initiated in India in 1992 by the Ministry of Power (MoP) to invite private investments in power generation to bridge the demand-supply gap
In the reform process distribution segment was identified as the key area for reform for putting the sector on the right track.Distribution Reforms involve System up-gradation, Loss reduction, Theft control, Consumer orientation, Commercialization andadoption of IT. The Government launched the Accelerated Power Development and Reforms Programme (APDRP) during the 10th Five Year Plan (2002-07) for the strengthening of Sub – Transmission and Distribution network and reduction in AT&C
Continuing its support for power distribution reforms, the Government launched the Restructured APDRP (R-APDRP) in the 11th Five Year Plan (2007-12) with revised terms and conditions. Under the Restructured Accelerated Power Development and Reforms Programmed (R-APDRP), State energy utilities are required to adopt measures for
Reducing Aggregate Technical & Commercial losses, Strengthen distribution network Improve commercial viability
R-APDRP
It was in this backdrop that the Restructured APDRP (R-APDRP) was conceived in September 2008.With a total program size ofRs 500bn, Restructured APDRP-II (R-APRDP) is Government of India‟s initiative to reform Distribution Sector as part of the 11th Five Year plan. The program is proposed to cover urban areas – towns and cities with population of more than 30,000 (10,000 in case of special category states). The power reform initiative is spread over two phases of:
Phase 1: Covering IT applications in the distribution sector Phase 2: Strengthening system improvement.
DISTRIBUTION SECTOR REFORMS
POWEREFFICENCY IMPROVEMENT IN DISTRIBUTION SECTOR
1. Distribution Franchising In Bhiwandi, Maharashtra M/s Torrent Power appointed Distribution Franchisee on energy input basis in Dec 2006 –
Customer base of 0.16 million
Area spread over 721 square kilometres.
The estimated demand in the circle is 750 MVA with an annual power consumption of 2400 million units.
• Achievements : 15% T&D loss reduction in 9 months (Losses brought down to 30% from 45%). Improvement in Metering, Billing and Revenue Collection Defective Energy meters (25300 Nos.) replaced. Approx. capital investment : USD 20 million Enhancement in customer service quality DT failure reduced by replacement and revamping of DTs
Models of: PPP
Benefits of Franchise Model• Reduction in technical losses and theft
• Improvement in Metering, Billing and Revenue Collection
• Capital investments in upgradation of the network
• Enhancement in customer service quality
POWERPOWER TRADING
Power trading inherently means a transaction where the price of power is negotiable and options exist about whom to trade with and for what quantum. In India, power trading is in an evolving stage and the volumes of exchange are not huge. All ultimate consumers of electricity are largely served by their respective State Electricity Boards or their successor entities, Power Departments, private licenses etc. and their relationship is primarily that of captive customers versus monopoly suppliers. In India, the generators of electricity like Central Generating Stations (CGSs), Independent Power Producers (IPPs) and State Electricity Boards (SEBs) have all their capacities tied up. Each SEB has an allocated share in central sector/ jointly owned projects and is expected to draw its share without much say about the price. In other words, the suppliers of electricity have little choice about whom to sell the power and the buyers have no choice about whom to purchase their power from.
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• PTC was formed in 1999 as a Government of India initiative for development of power market and incentivizing market based investments to the Power Sector, specially from the private sector:
• Pioneer Role : Initiated development of short term power market and introduced innovative products for customers
• Efforts lead to beginning of sustained trading during 2000-01 (1.6 Billion units ) and also optimum utilization
of existing resources
• Exponential growth established the viability of trading as a business concept
Facilitate development of Power Projects particularly through private investment
Promote Power Trading to optimally utilize the existing resources
Develop power market for market based investments into the Indian Power Sector
Promote exchange of power with neighbouring countries
POWERGENESIS OF POWER TRADING IN INDIA
Source : www.ptcindia.com
2003Electricity Act formalized concept of trading and
power market
2009Procedure, Terms and Conditions for grant of trading license and other related matters (Second
Amendment)
2013Procedure, Terms and Conditions for grant of trading license and other related matters)
(Second
Amendment)
POWEREVOLUTION OF THE TRADING REGULATIONS
Source : www.ptcindia.com
POWERINDIA POWER MARKET DESIGN
Source : www.ptcindia.com
POWERVOLUME OF ELECTRICITY TRANSACTED THROUGH TRADING LICENSES AND POWER EXCHANGES
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• Increasing realization among utilities of power as a source for revenue earning
• Improved PLF, particularly of State Power Utilities
An example: DVC - a rise of 5% in PLF
• No backing down
• Reduction in load shedding
• Encouraged IPPs to invest in generating assets- spurt in investment based on competitive tariff due to widening
demand –supply gap
Market-based returns
No sovereign/government guarantee
• Large merchant capacity is being funded
• States Governments of Chhattisgarh, Jharkhand, Orissa, Himachal Pradesh, J&K, Uttaranchal, etc. have
recognized “ Power as Resource”
• Planned rapid capacity additions – have devised policies to become Power Hubs
Benefits of Trading (1)
POWERBENEFITS OF TRADING
POWER
• Market depth to be increased – more players, regional participation
• Open Access Implementation
• New Segment of prospective participants
Industry
SEZs
HT consumers
Group Captives
Merchant generators
• Sufficient transmission capacities required for a vibrant power market
Government to initially support through ‘viability gap funding’
CHALLENGES IN POWER TRADING
Source: Company websites, News Articles, Aranca Research
Company Business description
• Power Finance Corporation Limited (PFC) is an NBFC engaged in financing and development activities within the Indian power sector
• Major products and services include project term loans, lease financing, direct discounting of bills, short-term loans and consultancy services
• Adani Power is one of India’s largest private thermal power producers, with total capacity of 4,620 MW; the company aims to generate 20,000 MW of power by 2020
• The company is building one of the world’s largest single-location thermal power plants in Mundra, Gujarat
• Power Grid Corporation of India Limited (PGCIL) is the single largest transmission utility in India; it is responsible for planning, co-ordination, supervision and control over inter-state transmission systems
• Damodar Valley Corporation is engaged in power generation, distribution and transmission of electric power, irrigation and flood control
• SJVN Limited is the second largest hydro power company in India• The company plans to diversify into wind power projects soon
POWERSOME MAJOR PLAYERS IN POWER MARKET
Source: Company websites, News Articles, Industry Sources, Aranca Research
Company Business description
• NTPC is India’s largest power producer and the sixth-largest thermal power producer in the world, with installed capacity of 41,184 MW (including 5,364 MW through JVs). By 2032, NTPC plans to reach 128,000
MW power capacity. Coal-based power accounts for more than 90 per cent of the total capacity• It has also diversified into hydro power, coal mining, power equipment manufacturing, oil and gas
exploration, power trading and distribution• Tata Power is India’s largest integrated power company, with significant presence in solar, hydro, wind and
geothermal energy space. The company accounts for 52 per cent of total generation capacity in the private sector, with an installed capacity of 8,521 MW
• The company has over 35,000 MW of power generation capacity, both operational and under development.
Reliance Power has an operational power generation capacity of 2,500 MW. FY13 saw the development of the 3,960 MW Sasan UMPP in Madhya Pradesh
• CESC Limited is a vertically integrated player engaged in coal mining, and generation and distribution of power
• NHPC is the largest hydro power utility in India, with an installed capacity of 5,295MW; it has drawn up a massive capacity expansion plan of adding 6,697 MW by 2017
• NHPC is constructing nine projects aggregating to a total installed capacity of 4271 MW. NHPC added 1,970MW and 1,150 MW during the 10th and 11th Plan periods, respectively
POWERSOME MAJOR PLAYERS IN POWER MARKET
POWER
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